The energy arm of Warren Buffett’s Berkshire Hathaway conglomerate has been observed to take a controlling share in a liquefied natural gas terminal on the coast of Maryland.
Natural gas turned into liquid which is LNG can be sent by ship in place of pipeline. And because of Russia’s invasion of Ukraine that cause natural gas prices a sharp increase last year. This results in American LNG catching the opportunity.
The Complete Plan
Notably, the LNG terminal in Maryland is one out of seven in the United States. At the same time, there has been an idea to come up with many more in the coming time.
A decade back, the U.S. was barely accountable to be an exporter of liquefied natural gas. Now the condition got changed. This has been said by Samantha Dart, head of global natural gas research at Goldman Sachs.
“This year, the U.S. will be the largest LNG exporter in the world,” Dart said. Additionally, various quantities of that LNG are goes to Europe. Also, this has been trying to stop via Russian gas since the war in Ukraine began.
The huge expensive build-out of LNG infrastructure has been acclaimed and considered as a required investment. While cost plays a vital role in order to become a major player in the sector.
“The U.S. exports LNG and exports energy security to the rest of the world, but imports volatility,” she explained.
Also, since the LNG process is very unstable in nature it is considered frequently to fulfill energy shortages around the globe. The statement was revealed by Clark Williams-Derry, who is an analyst at the Institute for Energy Economics and Financial Analysis. “So if there’s a cold snap in north Asia, if there’s a drought in Brazil or as we saw last year, if there’s a war in Europe, that disrupts gas supplies. Then, LNG gets called on to backfill those shortages,” Williams-Derry said.
LNG Contract
In addition to this, more natural gas is being sent to aboard, which results in a great fluctuation faced by U.S consumers. The condition depicts the times when it has been facing great price hikes. The same has been prices doubled or tripled or quadrupled, stated by Williams-Derry. While it can help, but not guaranteed said Anna Mikulska, which is a fellow at Rice University’s Baker Institute.
“U.S. LNG is not owned by the U.S. government. It’s owned by private companies that are directed by profit, whether there is a demand for the gas and so on and so on,” Mikulska said.
Moving ahead, a feature of a U.S. LNG contract is that whereby once a buyer chooses a U.S. port then there are no words about where it going to end up. Furthermore, as per Mikulska, with the increased role of the U.S. in the LNG market, the fuel’s utility as a geopolitical tool has declined.
